A press release dated September 25, 2008 stated that the Fifth District Appellate Court has dismissed an appeal by Tyson Foods for summary judgment in a Madison County class action suit filed over allegations that the company putting too much water in prepackaged chicken. The report recounts that Tyson had filed a motion for summary judgment on the basis that federal law preempts the plaintiffs' claims. However, that request was denied by Madison County Circuit Judge Ralph Mendelsohn. Tyson then appealed Judge Mendelsohn's ruling. In an opinion released on Sept. 19 2008, Justice Stephen Spomer wrote that Tyson's appeal lacks appellate jurisdiction.
According to the Company’s FORM 10-Q for the quarterly period ended December 31, 2005, oral arguments on the appeal were heard by the Court of Appeals September 13, 2005 and on November 9, 2005, the Court of Appeals affirmed the decision of the District Court. On November 23, 2005, plaintiffs filed a petition for rehearing with the Court of Appeals. The Court of Appeals denied the petition on December 21, 2005.
As summarized by the same SEC filing, between June 22 and July 20, 2001, various plaintiffs commenced actions in the U.S. District Court for the District of Delaware. The various actions were subsequently consolidated under the caption In re Tyson Foods, Inc. Securities Litigation and, on December 4, 2001, the plaintiffs in the consolidated action filed a Consolidated Class Action Complaint. On January 22, 2002, the defendants filed a motion to dismiss the consolidated complaint. By memorandum order dated October 23, 2002, the District Court granted in part and denied in part the defendants' motion to dismiss. On October 6, 2003, the District Court certified a class consisting of those who purchased IBP securities on or before March 29, 2001, and subsequently sold such securities from March 30 through June 15, 2001, inclusive, and sustained damages as a result of such transaction. Following the conclusion of discovery in the case, plaintiffs and defendants each filed motions for summary judgment. On June 17, 2004, the District Court rendered an opinion in favor of defendants and against plaintiffs on all of plaintiffs’ claims, and entered an order to that effect. On June 28, 2004, defendants filed a motion requesting the District Court to modify its order to include judgment in defendants’ favor against the class and on July 30, 2004, the District Court entered such an order. On August 6, 2004, plaintiffs filed a Notice of Appeal. Plaintiffs filed their brief on the appeal on December 8, 2004. Defendants filed their response on January 24, 2005. Plaintiffs filed their reply brief on February 24, 2005.
The original complaint charges Tyson Foods, Inc. (``Tyson'' or the ``Company''), the Company's founder and controlling stockholder, the Company's Chief Executive Officer and the Company's Executive Vice President and General Counsel with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that on March 29, 2001, Tyson announced it would terminate a proposed merger between Tyson and IBP (the ``Merger'') because Tyson purportedly relied upon misleading information furnished by IBP concerning an SEC comment letter and the financial results at an IBP subsidiary in determining to enter into the Merger Agreement. It was not until June 15, 2001, when, in an action brought by IBP shareholders, In re IBP, Inc. Shareholders Litigation, Consolidated Civil Action No. 18373 (Del. Ch., June 15, 2001), the Court concluded that Tyson's decision to withdraw from the Merger had nothing to do with the SEC comment letter or the problems at IBP's subsidiary.